Supplier switching and outsourcing

We examine supplier switching decisions using a unique database that tracks firms (credit unions) and their suppliers (data processing vendors); the data are in a panel, allowing us to track supplier switching decisions at a new level of detail. We focus on two sets of relationships. First, we estimate a model that relates supplier choices and switching to a variety of buyer- and supplier-specific characteristics. Second, we examine how> switching depends on the vendor relationships that credit unions choose: one is a partial form of outsourcing while the other is more complete. This allows us to estimate how supplier switching interacts with organizational form.Credit unions ; Contracting out

Supplier switching decisions

Die vorliegende Arbeit ist der Thematik des Lieferantenwechsels gewidmet. Im Vordergrund stehen dabei zunächst Fragestellungen zur Notwendigkeit und Durchführbarkeit solcher Wechsel („need for and easiness of switching“). Während erstere sich in spezifischen Motiven wie Preisvorteilen und Qualitätssteigerungen, die einen Lieferantenwechsel auslösen, widerspiegeln und auf Charakteristika von Produkten, Arbeitsabläufen und Branchen zurückzuführen sind, wird letztere maßgeblich von Faktoren wie der gewählten Beschaffungsstrategie bzw. der Beschaffenheit des Umfelds und der Ausgestaltung der Lieferantenkette beeinflusst. Allgemein lässt sich festhalten, dass die Wechselbeziehung beider Einflussfaktoren zueinander das Verhalten eines zukaufenden Unternehmens in maßgeblicher Weise bestimmt. Im nächsten Schritt werden die Abläufe eines Lieferantenwechsels näher beleuchtet und anhand einer Erörterung der dabei zu durchlaufenden Phasen der Entscheidungsfindung, der Ausführung im engeren Sinn und der Erfolgsevaluierung strukturiert. Diese umfassen vor der eigentlichen Entscheidung zugunsten oder gegen einen Lieferantenwechsel liegende Vorgänge und Maßnahmen, etwa das Feststellen von Defiziten auf Seiten des Lieferanten, als auch solche, die dem Wechsel im engeren Sinn zeitlich nachfolgen (Evaluierung ex-post). Das umfangreichste Kapitel ist der Betrachtung zweier Modelle gewidmet, die sich bei der Beantwortung der Frage nach dem optimalen Zeitpunkt bzw. der bestmöglichen Umsetzung eines Lieferantenwechsels unterschiedlicher Herangehensweisen bedienen. Im Zentrum des von Demski, Sappington und Spiller (1987) entwickelten Modells steht der Vergleich zweier Instrumente zur Prüfung der vom bestehenden Lieferanten berichteten Kosten (Eintreten eines alternativen Lieferanten und Verwendung eines Kontrollinstruments). Ihr Ziel ist es, der Entscheidung für oder gegen eine weitere Zusammenarbeit eine fundierte Grundlage zu geben. Zu den dabei gewonnenen Erkenntnissen zählt, dass eine Entscheidung zugunsten eines Eintritts, abhängig von den jeweiligen Gegebenheiten, wahrscheinlicher ist als eine solche zugunsten der Verwendung des Kontrollinstruments. Es erweist sich darüber hinaus, dass die Produktion eines neu eintretenden Lieferanten auch dann optimal ist, wenn dieser höhere Kosten hat. Wagner und Friedl (2007) untersuchen, ob sich ein Unternehmen im Falle asymmetrischer bzw. symmetrischer Kosteninformation für einen partiellen oder kompletten Lieferantenwechsel entschließt. Dabei zeigt sich, dass eine Entscheidung zugunsten eines kompletten Wechsels oder zugunsten des bestehenden Lieferanten gefällt wird. Andererseits wird evident, dass im Falle von nicht 85 zu beobachtenden Kosten Trägheit („inertia“) seitens des zukaufenden Unternehmens auftritt. Eine Erweiterung des Modells um die Faktoren Wettbewerb und Skaleneffekte berücksichtigt deren Einfluss auf das Verhalten des bestehenden Lieferanten und die Entscheidung des Käufers. Hier zeigt sich, dass, abhängig von den jeweiligen Gegebenheiten, eine Entscheidung zugunsten einer Fortsetzung oder einer Beendigung der Zusammenarbeit bzw. der Inanspruchnahme beider Lieferanten getroffen wird. Schließlich werden jene Faktoren beschrieben, die den Entschluss zugunsten eines Lieferantenwechsels erschweren. Hierzu zählen den Entscheidungsträgern bzw. anderen involvierten Personen zuschreibbare Hemmnisse, Unsicherheiten, notwendige Investitionen und durch den Wechsel entstehende Kosten. Als wesentlicher Faktor zu berücksichtigen ist darüber hinaus die Trägheit, einen Wechsel zu vollziehen, die ihrerseits wesentlich von psychologischen Phänomenen, insbesondere dem Status- Quo-Effekt und der Tendenz, Entscheidungen nach Möglichkeit auszuweichen („decision avoidance“), geprägt ist. Die Arbeit schließt mit einer kurzen Darstellung von Aktivitäten, die dazu beitragen sollen, unnötig hohe Aufwendungen, sowohl in Bezug auf die eingesetzten finanziellen Mittel als auch die in Anspruch genommene Arbeitszeit, zu vermeiden und gibt abschließend die Empfehlung zur strategischen Positionierung des zuliefernden Unternehmens.The work at hand deals with the subject matter of supplier switching. At first, the need for and the easiness of switching are examined. The need for switching is reflected in motives causing switching, such as lower prices and poor quality, and contingencies or characteristics of industries, processes or products creating the need. The easiness of switching is influenced by a great number of factors related to different sourcing strategies, conditions of the switching environment and design decisions of a supply chain. In conclusion, the balancing of the need for and the easiness of switching delivers insights into the switching behaviour of buying companies. In order to structure the whole switching process, the different phases which have to be run through in the course of a supplier switch are dealt with thereafter. Supplierswitching decision, execution and success evaluation phase comprise activities ranging from actions taken prior to the switching decision as, for example, the identification of a supplier weakness, to the final success evaluation succeeding the performed switch. The work’s main part examines two models which deal with the option of replacing the incumbent supplier using different approaches in order to find out when and how it is optimal to switch. Demski, Sappington and Spiller (1987) focus on the comparison of entry and auditing as instruments to verify the reported costs of the established supplier against the background of changing the supplier or remaining with the present one. Their model shows that, depending on the conditions, a decision in favour of entry is more probable than in favour of auditing and that production by the entrant is optimal even in case of high costs on his part. Wagner and Friedl (2007) examine whether a company decides in favour of entire or partial switching in case of symmetric and asymmetric cost information on the part of the purchaser. It shows that full or no switching takes place and that inertia appears on the part of rational purchasers in course of a switching decision when the suppliers’ costs are unobservable. Then, the factors competition and economies of scale are introduced to highlight their impact on the established supplier and the switching decision. Here, it becomes obvious that, depending on the conditions, a decision in favour of no, partial or complete switching will be made. Finally, factors having a hindering impact on the decision in favour of supplier switching are examined. They include barriers attributable to the behaviour of decision makers and other persons of the buying company involved, uncertainty, specific investments and switching costs. Strongly related to those psychological phenomena denominated as status quo effect and decision avoidance, switching inertia is highlighted as being another greatly important factor in this regard. The chapter is completed by a short 83 description of activities which should help to avoid spending too large amounts of resources and time to improve the incumbent supplier’s performance and, lastly, by the recommendation of pursuing strategic positioning

The Effect of Product Variety on Inventory Turnover in Different Modes of Operation

We study the effects of product variety on operational metrics - inventory turnover and on sales in different mode of operations. Research has shown that performance metrics can vary in different mode of operations. Using 41 months of data from a large retailer, we show that correlation of product variety with inventory turnover and sales is not always negative or positive as shown in previous studies. This correlation can vary depending upon the mode of operations and type of product. Our study highlights impact of increased product variety on inventory turnover and sales in different mode of operations that has previously been overlooked in studies of retail product variety and inventory management. It also quantifies the impact of product variety on inventory turnover and sales

CUSTOMER SWITCHING BEHAVIOUR OF AIRY ROOMS USERS USING PUSH-PULL-MOORING APPROACH

There are data that show a decrease in occupancy rates of star-rated hotels and rise of budget hotels in Indonesia. Supported by customer reviews which explain their reasons for choosing budget hotels over star hotels, this switching behavior may reduce the demand of star hotel services. This study aims to determine the Push-Pull-Mooring (PPM) factors on the intention and behavior of hotel service users. This study uses PPM with quantitative method using 400 samples. The samples were determined using Non-Probability Sampling, analyzed with SEM research analysis method and processed using SmartPLS. The results showed that PPM factors significantly affected the Switching Intention as well as Switching Behavior. However, Mooring factor does not have a significant effect on intensing switching either a significant influence on the Push and Pull factors of Switching Intention

An Empirical examination of the product variety management in Brazilian Bus Body Manufacturer

The main purpose of this paper is to understand how product variety is managed in practice. In this sense, it presents a panorama of the various aspects of product variety taken from the academic literature. Despite the importance of the theme, there are few studies related to PVM (Product variety management) and this paper is useful for academics interested in it. This paper is one of the first efforts to fulfill the gap in the literature regarding empirical studies related to PVM. The study is classified as explanatory and descriptive and offers a complete overview of how PVM is applied in the automotive industry. It shows that product variety management is an interdisciplinary issue, as the literature suggests, and that its effects can be perceived in all corporate areas in different ways. The data were collected in a limited way and can’t be generalized. It refers to a single firm in one industry in one country. Future studies should be developed in order to compare different business arena and countries.O principal objetivo deste artigo é entender como a variedade de produtos é gerenciada na prática. Nesse sentido, apresenta um panorama dos diversos aspectos da variedade de produtos retirados da literatura acadêmica. Apesar da importância do tema, existem poucos estudos relacionados ao GVP (Gestão de variedades de produtos) e este trabalho é útil para acadêmicos interessados no tema. Este trabalho é um dos primeiros esforços para preencher a lacuna na literatura sobre estudos empíricos relacionados ao GVP. O estudo é classificado como explicativo e descritivo e oferece uma visão geral completa de como o GVP é aplicado na indústria automotiva. Isso mostra que a gestão de variedades de produtos é uma questão interdisciplinar, como a literatura sugere, e que seus efeitos podem ser percebidos em todas as áreas corporativas de diferentes maneiras. Os dados da pesquisa foram coletados de forma limitada e não podem ser generalizados. Refere-se a uma única empresa em um setor em um país. Estudos futuros devem ser desenvolvidos para comparar diferentes áreas de negócios e países

Theorizing through metaphorical transfer in OM/SCM research: Divorce as a metaphor for strategic buyerâ supplier relationship dissolution

Operations Management and Supply Chain Management (OM/SCM), as a discipline, can benefit from proper theorizing to address persistent urgings for better and new theories. This paper hopes to inspire more theorizing engagements through the formal process of metaphorical transfer. Metaphorical transfer transforms casuallyâ invoked metaphors in everyday language into theoryâ constitutive metaphors. This transformation process first mandates theorizing to ensure equivalence between the domain of the metaphor and that of a target phenomenon or research problem of interest. Second, theorizing during metaphorical transfer occurs when abstracted insights intended to govern both the metaphor and target phenomenon materialize. Finally, metaphorical transfer supports borrowing of theories from outside of OM/SCM for testing within OM/SCM by safeguarding against common mistakes. This paper demonstrates metaphorical transfer via the example of divorce and strategic buyerâ supplier relationship dissolution and concludes by highlighting other metaphors that may be invoked for a number of exemplary supply chain relationship phenomena.Peer Reviewedhttps://deepblue.lib.umich.edu/bitstream/2027.42/147073/1/joom579.pd

Conceptualizing the supplier switching process: An example from public procurement

Purpose This paper aims to develop a framework for switching a service supplier in a supply network. Design/methodology/approach The study builds on existing literature in the field of purchasing and supply management, public procurement (PP) and the Industrial Marketing and Purchasing approach, as well as on an illustrative example case, from the PP context, of a supplier switch in a service delivery process. Findings During a switching process, the buyer must simultaneously manage the ending of a relationship with the incumbent supplier and the beginning of a relationship with a new supplier. Collaboration with the focal suppliers to develop a service process with standardized components prevents disruptions in the service processes and reduces the impact of the switch on the wider network. Research limitations/implications The conceptualization suggested in this paper needs to be further explored in different empirical contexts to assess its practical adequacy. Practical implications Practitioners responsible for service procurement can use the findings to develop collaboration with suppliers, both when it comes to service process development and to the switching process. Furthermore, the authors highlight the importance of ending competencies and the development of an exit plan to conduct a “beautiful exit.” Originality/value The paper integrates relationship initiation and ending studies, as well as procurement process models to develop a refined switching process framework. Many PPs rely on short-term relationships due to the legal obligation to frequently invite suppliers to tender, thus understanding the supplier switching process is important both for private and public sector actors.©2021 Emerald Publishing Limited. This manuscript version is made available under the Creative Commons Attribution–NonCommercial 4.0 International (CC BY–NC 4.0) license, https://creativecommons.org/licenses/by-nc/4.0/fi=vertaisarvioitu|en=peerReviewed